The headline is misleading. But no sooner than had my blogpost appeared on USNews.com yesterday (and was linked on Real Clear Politics this morning) than I saw Alan Greenspan's opinion article in the Wall Street Journal responding to the subject of my blog post, Stanford and Hoover Institution Professor and former Deputy Treasury Secretary John Taylor. Taylor argued that Greenspan as Federal Reserve Chairman helped cause the housing bubble by holding interest rates down too long. Greenspan argues that the housing bubble was caused by the huge flow of Chinese and other savings into the global marketplace which drove down long-range interest rates more than they had been driven down in the past in similar circumstances. I won't try to settle this argument between two economists whom I respect very much. I think there's a lot to learn from both Taylor's short book and Greenspan's response.
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By Michael Barone